Local trash hauler files protest over award of solid waste contract

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Not quite three hours before the deadline, a local residential trash hauler filed a protest to the award of a contract shifting all residential trash services in the unincorporated county to Waste Management.

The next day, the county issued a letter to Waste Management directing the company to "stop work" on any post-contract award activities. The trash hauler was slated to begin services on April 1.

County commissioners awarded an eight-year contract to Waste Management at their Dec. 19 meeting.

Los Lunas-based New Mexico Disposal, the only other qualified respondent to the county's solid waste request for proposals, protested the award of the contract under the due process clauses in the constitutions of the United States and the state of New Mexico.

New Mexico Disposal's attorney Amavalise Jaramillo writes that the contract for solid waste services is an award of a public franchise, not a contract for goods and services, and therefore the due process clauses "guarantee fundamental due process and the opportunity to be heard by elected officials, offerors and the public at large in the context of awarding exclusive public franchises."

Jaramillo argues that the evaluation committee erred in relying on state procurement code because section 13-1-98 (D) of the code exempts refuse service from the scope of its application.

The section of the procurement code he referenced indicates the provisions of the procurement code shall not apply to "purchases of publicly provided or publicly regulated gas, electricity, water, sewer and refuse collection services," among other exemptions.

The protest also alleges that the county violated the Open Meetings Act in the appointment of the members of the evaluation committee, and by amending the Dec. 19 agenda two days before the meeting to include the consideration of the contract.

Jaramillo concludes the protest by saying the process used by the county to award the contract "created an unlevel playing field in violation of the commission's mandate to select the most advantageous bidder."

New Mexico Disposal President Ernie Byers said his company decided to protest the contract award because his company had a lot of time and money invested in the project.

"All we want is due process, to be treated fair and equally," Byers said. "Unfortunately, that didn't work."

When asked what preparations the company was making in regards to possible layoffs and selling of equipment if the protest failed, Byers said he was "looking at a positive outcome."

He estimated the company, which was incorporated in 2010 in California, could potentially lose 3,000 to 4,000 residential trash customers in Valencia County if its protest is unsuccessful.

Sarah Schnell, the county environmental coordinator, said the number of residential trash accounts served by each hauler can be estimated based on the haulers' franchise payments.

New Mexico Disposal reported no residential customers — made no residential franchise payments — in the fall of 2012.

Byers did not return calls before News-Bulletin press time seeking clarification on the discrepancy.

In that same time period, Waste Management made payments for about 5,600 customers, AC Disposal for 1,350 and Valley Disposal for 650 residential accounts, according to Schnell.

Mike Vinyard, county procurement agent, said he was confident in the procurement.

"I don't see the process as flawed. On a major procurement, we always expect the unsuccessful offeror or offerors to protest to make sure we did it right," Vinyard said.

The county commissioners will review the protest determination at their Jan. 23 meeting before it is sent to New Mexico Disposal, Vinyard said.

If the company disagrees with the county's determination, it could appeal the matter to district court, Vinyard said.

"I am still confident we will prevail," he said.

Shortly after the contract was awarded to Waste Management, the county advised all permitted residential trash haulers in the county that their permits will be terminated on April 1.

County attorney Dave Pato said if the protest were to extend past that termination date, "I would surmise that the county would extend the franchise agreements as necessary to provide continuous and uninterrupted solid waste collection service to the residents of the county."

Charles Montoya, owner of Jarales-based AC Disposal, said the commissioners' decision to go with an exclusive hauler would "put us out of business to a certain point."

Montoya said his company and all of his residential customers would be taken over by Waste Management later this spring if the award is upheld.

Montoya said he is already thinking about selling some of his residential trash trucks and carts.

One major criticism Montoya had was that the contract doesn't address who is responsible for delinquent accounts.

"They are going to have a lot of people fighting them," Montoya said. "The county is going to be sitting on a lot of delinquencies. We have 30 percent delinquency of people who want us. Think about the rate among those who don't want it."

Montoya said he was upset to see the contract go to a Rio Rancho-based company, taking gross receipts taxes out of the county.

"You talk to any government official, and they will tell you local business is what keeps a community going," he said. "These commissioners are sending it away."

The same day the contract was awarded, Jaramillo submitted a letter to the commissioners on behalf of New Mexico Disposal, alleging that the county failed to give the public proper notice and opportunity to be heard on the appointment of the members of the RFP evaluation committee as required by OMA.

The letter also alleged the commissioners inappropriately negotiated the solid waste contract in executive session.

In Pato's response, he says the county's purchasing policy allows the county manager to appoint an evaluation committee, unless the commissioners choose to do so. In this case, Pato says the commissioners did not appoint the committee, instead leaving that duty to the manager, who is not subject to OMA.

In regards to the commissioners negotiating the contract in executive session, Pato writes that the part of a meeting during which the contents of competitive sealed proposals are discussed during the contract negotiation process can be held in closed session.


-- Email the author at jdendinger@news-bulletin.com.